Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: D.J.Smyth who wrote (164699)	4/11/2001 10:55:08 AM
From: GVTucker	Read Replies (2) \| Respond to of 176387

Why will DELL not provide investors a decent return on a purchase at $50 a share or so? Well, first of all, I would say that a decent return is around 10% annualized. That means that in 10 years, DELL stock would have to be at $130 for those purchasers to get a decent return. Next, DELL's competitive advantage over the years has been their ability to put together a box (whether it is a desktop or a low end server) much more cheaply than anyone else. At DELL's current price of $27 (which I would consider on the high end of what is reasonable right now at 30x earnings), DELL would need to return about 20% per year to reach that "decent" return I outlined above. That is a very high bar for a long term annualized return, a bar that I can't see DELL achieving.